IonQ Stock Has The Potential To Become A Long-Term Compounder NYSE:IONQ - Commune la Marsa (2024)

The sector is expected to grow in the next few years, owing to rising disposable income, rapidly growing middle class, and increased travel demand. Furthermore, the price of jet fuel is expected to stay relatively stable, allowing airlines to levy surcharges and earn additional revenue from passenger and freight transport. Therefore, the bulls rushed back to Uber because it proved that its business model was sustainable. It wasn’t growing as rapidly as it had in the past, but it was exercising its pricing power, making smart cost-cutting decisions, and generating consistent profits. In other words, I underestimated Uber’s ability to weather the inflationary headwinds.

  • Operating income is the amount of profit a business makes after deducting all of its operating expenses.
  • The also announced they will be producing an AQ 64 system, which they expect to be able to solve problems that current non-quantum supercomputers cannot.
  • The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
  • The tax rate is assumed to be 20%, which we’ll multiply by our pre-tax income (EBT), which comes out to $8 million in taxes.
  • If their revenue growth fails to meet expectations, their gross margins contract, or their expenses rise, IonQ’s available capital will run out more quickly than expected.

EBIT is an accrual-accounting-based measure of profitability prepared under U.S. While EBITDA also deducts COGS and operating expenses, Capex is neglected in its entirety. Like EBIT, the initial outlay from the Capex is ignored, yet EBITDA also removes the effects of the depreciation expense. The most straightforward difference between EBIT and EBITDA is that the latter is adjusted to add back non-cash expenses like depreciation and amortization.

About IONQ Stock

EBITDA, shorthand for “Earnings Before Interest, Taxes, Depreciation, and Amortization”, is a company’s normalized, pre-tax cash flow generated by its core operations. Investors can use EV/EBITDA, which is a ratio that compares the total value of a company to the amount of EBITDA it earns on an annual basis. To find EV, add outstanding debt to market capitalization, then subtract available cash. EBITDA can be used in a calculation with enterprise value (EV) to find a company’s valuation.

With enthusiasm for quantum computing currently elevated, our forward looking markets may grant IonQ further valuation improvements off of positive guidance. Instead of trying to cover this double edged sword as a part of risks or catalysts, I decided to move it to its own separate section. This company maintains a significant number of highly educated and experienced employees. As a way of both paying them what they deserve and aligning their interests with the long-term success of the company, IonQ hands out a significant amount of stock based compensation. Their ttm SBC comes to $47.4M, and this most recent quarter, it was $17M worth of shares.

View All

Yes, EBITDA can be negative if a company’s operating expenses and/or non-operating expenses exceed its revenue. The cash flow statement (CFS) reconciles the GAAP-based net income for non-cash items and changes in working capital line items to reflect the true cash generated by a company. By excluding financing and accounting decisions, different companies’ overall profitability is comparable.

The Significance of EBITDA

In other words, the EBITDA calculation excludes debt financing costs, taxes and depreciation expense on equipment purchases. Companies with a positive EBITDA figure may be on the brink of bankruptcy. On the other hand, EBITDA measures overall profitability, including all operating expenses, which means variable costs plus fixed costs. Fixed costs are expenses that do not change with the volume of produced and sold products, such as administrative expenses.

The difference between Net Profit

Second, macro headwinds would drive more property owners to rent out their properties to generate extra cash. They have increased their outlook for full year revenue to fall in the range of $21.2M to $22M. They are also providing guidance that they expect for Q4 revenue to land between $5.3M and $6.1M. In September, they announced they believed they would be able to reach AQ 64 through the use of error mitigation instead of full error correction. I found three different projected growth rates for the global quantum computing market.

It is often used to evaluate companies with significant capital expenditures or those that have recently undergone major changes, such as mergers or acquisitions. EBITDA can capture the operating efficiency of a company because the metric excludes non-operating expenses and certain non-cash items. The purpose of excluding these items is to analyze a company’s profitability without accounting for its capital structure. The income that a company makes from doing business is referred to as its earnings. When looking at EBITDA calculations, earnings usually represent operating income. Operating income is the amount of profit a business makes after deducting all of its operating expenses.

Formulas for EBITDA and gross profits

They are very likely to have to raise additional capital within the next year so Mr. Market is only valuing them at a trailing P/S ratio of 8.85x. The EBITDA of our company can be determined by adding the D&A expense – which we’ll assume to have pulled from the cash flow statement (CFS) – to EBIT from the income statement. In contrast, the calculation of EBITDA deducts from revenue the cost of goods sold (COGS) and operating expenses (SG&A) incurred by a company, but not non-cash items (D&A). Gross profit is the profit of a company after deducting from its turnover all the costs incurred in producing a product or providing a service. Gross profit is calculated using figures from the profit and loss account and is an important indicator for companies, lenders and investors.

As an expert in finance and business, my deep understanding of various concepts and principles allows me to shed light on the information presented in the article. Let's break down the key concepts used in the passage:

  1. Sector Growth Factors: The article discusses the expected growth of a particular sector, attributing it to rising disposable income, a growing middle class, and increased travel demand. These factors indicate a positive outlook for industries related to travel and transportation.

  2. Uber's Business Model Sustainability: The bulls' return to Uber is explained by the company's sustainable business model. While not growing as rapidly as before, Uber demonstrates the ability to exercise pricing power, implement cost-cutting strategies, and generate consistent profits. This showcases the importance of a resilient business model even in the face of challenges like inflationary headwinds.

  3. Operating Income: Operating income is defined as the profit a business makes after deducting all operating expenses. This financial metric is crucial in assessing a company's profitability from its core operations.

  4. AQ 64 System and Quantum Computing: The article mentions the development of an AQ 64 system that aims to solve problems beyond the capability of current non-quantum supercomputers. This highlights the advancement and potential of quantum computing in addressing complex issues.

  5. POWR Ratings Calculation: The POWR Ratings are calculated based on 118 different factors, with each factor weighted optimally. These ratings likely provide insights into the overall performance and potential of a particular entity.

  6. Tax Rate and EBT (Earnings Before Tax): The tax rate assumed is 20%, and the article explains multiplying it by the pre-tax income (EBT) to calculate taxes owed by a business.

  7. IonQ's Capital and Revenue Growth Concerns: Concerns are raised about IonQ's available capital running out quickly if revenue growth falls short, gross margins contract, or expenses rise. This emphasizes the financial challenges faced by companies in managing their capital.

  8. EBIT vs. EBITDA: EBIT (Earnings Before Interest and Taxes) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) are compared. EBITDA is described as a normalized, pre-tax cash flow metric that excludes non-cash expenses like depreciation and amortization.

  9. EV/EBITDA Ratio: The EV/EBITDA ratio is introduced as a measure comparing a company's total value to the EBITDA it earns annually. The calculation involves adding outstanding debt to market capitalization and subtracting available cash.

  10. Quantum Computing Market Growth: The article mentions the elevated enthusiasm for quantum computing, indicating potential valuation improvements for IonQ based on positive guidance and forward-looking market expectations.

  11. Stock-Based Compensation (SBC): IonQ's significant stock-based compensation is highlighted as a way to reward employees and align their interests with the long-term success of the company.

  12. EBITDA Negativity and Cash Flow Statement: EBITDA can be negative if operating and/or non-operating expenses exceed revenue. The cash flow statement is emphasized for reconciling GAAP-based net income to reflect the true cash generated by a company.

  13. EBITDA's Significance and Exclusions: The article explains that EBITDA excludes debt financing costs, taxes, and depreciation expense on equipment purchases. It captures overall profitability, including both variable and fixed costs.

  14. Outlook for Full-Year Revenue: A company's outlook for full-year revenue is increased, with specific revenue range projections provided for both the full year and Q4.

  15. Gross Profit and Trailing P/S Ratio: The concept of gross profit is briefly explained as the profit after deducting costs incurred in producing goods or providing services. The article also mentions the trailing P/S (Price-to-Sales) ratio as a valuation metric.

In summary, the article covers a wide range of financial and business concepts, from sector growth factors to quantum computing, financial metrics like EBITDA, and considerations for company valuation and profitability.

IonQ Stock Has The Potential To Become A Long-Term Compounder NYSE:IONQ - Commune la Marsa (2024)


Top Articles
Latest Posts
Article information

Author: Tish Haag

Last Updated:

Views: 6196

Rating: 4.7 / 5 (67 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Tish Haag

Birthday: 1999-11-18

Address: 30256 Tara Expressway, Kutchburgh, VT 92892-0078

Phone: +4215847628708

Job: Internal Consulting Engineer

Hobby: Roller skating, Roller skating, Kayaking, Flying, Graffiti, Ghost hunting, scrapbook

Introduction: My name is Tish Haag, I am a excited, delightful, curious, beautiful, agreeable, enchanting, fancy person who loves writing and wants to share my knowledge and understanding with you.